TR Economy & Updates

[what]

Turkey defies warnings and cuts interest rates

Lira tumbles as economists fret that loose monetary policy will spur inflation

www.ft.com

Turkish manufacturers squeezed by soaring costs

Producer price index has risen 46% year on year, the highest rate in nearly two decades

www.ft.com

Erdogan’s wrath is damaging Turkey

Turkish president’s persecution of Osman Kavala is personal

www.ft.com

I honestly dont know what else to say. This is going to be a disaster.

 

[Xenon54]

Turkey defies warnings and cuts interest rates

Lira tumbles as economists fret that loose monetary policy will spur inflation

www.ft.com

Turkish manufacturers squeezed by soaring costs

Producer price index has risen 46% year on year, the highest rate in nearly two decades

www.ft.com

Erdogan’s wrath is damaging Turkey

Turkish president’s persecution of Osman Kavala is personal

www.ft.com

I honestly dont know what else to say. This is going to be a disaster.

Cant read, need subscription.

 

[what]

Cant read, need subscription.

I hate those paywalls, try this: https://github.com/iamadamdev/bypass-paywalls-chrome

 

[Anastasius]

I hate those paywalls, try this: https://github.com/iamadamdev/bypass-paywalls-chrome

Try archive.today then post the resulting links to the saved page.

Ok TR I/R is at 15% now:

Bloomberg - Are you a robot?

www.bloomberg.com

“The decision to cut rates is politically motivated even with their December forward guidance,” said Saed Abukarsh, chief portfolio manager at Ark Capital Management Dubai. “Confidence in any form of central bank credibility has left the door.”


BTW, what I mentioned earlier in thread is now also going to be issue soon that leaves more damage in its wake (however TR central bank manages to swallow this pill and maintain a smile on face) for 2022:

Search results for query: repayment

defencehub.live

From article:

Turkish companies and the government have to repay $13 billion in foreign-currency debt in the final two months of the year. More than half -- $8 billion -- is set to mature in November, the biggest amount due over the next 10 months, according to the latest available data.

Reminds me of Abdulhamid II who took out massive loans which he wasted on extravagant building projects and left Turkey in massive debt which the country had to keep paying off until, like, 1954 IIRC. Kind of ironically fitting since Erdogan is such a huge fan of Abdulhamid II.

 

[Xenon54]

Try archive.today then post the resulting links to the saved page.

Reminds me of Abdulhamid II who took out massive loans which he wasted on extravagant building projects and left Turkey in massive debt which the country had to keep paying off until, like, 1954 IIRC. Kind of ironically fitting since Erdogan is such a huge fan of Abdulhamid II.

Well the state is gonna pay the next 40 years for the extravagant projects of our current sultan.

 

[Saithan]

New firms launching in Turkey up by 6.6% Jan-Oct - Latest News

The number of newly established companies in Turkey rose by 6.6% year-on-year in the first 10 months of this year, the country's top trade body said on Nov. 18.

www.hurriyetdailynews.com

 

[TheInsider]

Not really. If religious rules were his main concern, he would have started with a million other issues in our society. He simply and stupidly believes that low interest rate equals growth equals wealth.

He believes low-interest rates--->more and easier investments--->more jobs and production--->less inflation and more exports. At first look, this looks like a solid thought process but this whole chain won't work if you don't control inflation first and let inflation run rampant. This is actually a noob mistake.,

First, you have to take firm control of the inflation after that you can lower interest rates one notch at a time. Otherwise, devaluation will happen and things will go really bad. There is a difference between lowering the value of your overvalued currency (1$= 1.5 TL to 1$=6TL±1) for a better export/investment environment and devaluing your currency(1$=10TL+) just for the sake of bringing interest rates down. Mindless devaluation doesn't bring any added advantages for exports it works like diminishing returns and lower interest rates won't help for new investments if your currency turns into toilet paper.
Türkiye is making big efforts to transition into a producer/exporter economy with private and state-backed private investments and nationalizing logistics chains for the products Türkiye produces but I doubt things will be better for the average citizen until Türkiye exports like 400billion$ and has a positive foreign trade balance. This might take up to a decade and might also fail in the end.
I agree that Türkiye should transition to an export-based economy, I agree that TL was heavily overvalued in the past and I agree that interest rates should be lower but this is not how you execute this policy.

Ideally, Erdo should have assembled highly regarded technocrats and economists around a table, given them those terms as goals(export/production-based economy, low-interest rate, and fair value of TL), and let them debate how to reach those goals, and ask them to prepare a plan rather than trying to enforce his will from above.

 

[karajlo]

well if he is doing it intentionally i don't think he will run in next elections...he obviously thinks this is something that needs to be done and will use the rest of his term to put the country on that way so that when new government comes they won't have the choice but to continue his path instead going backwards

 

[Zafer]

There is a window of opportunity to boost production and exports; you either take it or lose it.

 

[AWP]

I have 2 questions to ask if anyone can give me an answer

1- at what interest rate we will see the Lira regain power ? 25% or more than 30 % ?
2- do the government have the authority to stop the people to take loans from local or international banks ?

 

[Rodeo]

There is a window of opportunity to boost production and exports; you either take it or lose it.

There is a limit to how much you can capitilaze on low currency. Devaluing lira makes no sense when you're already running on full capacity and your order book is already full. The new factories will give more capacity but those are years long projects. So at this point the lower lira benefits us very little while costs us very much.

 

[Constan]

What I think he's trying to do is = low lira => more export opportunities => more industries investments => low unemployment rate. However, this two-edged sword, people in Turkey will not trust lira any more and dollarization will increase.

 

[Rodeo]

I have 2 questions to ask if anyone can give me an answer

1- at what interest rate we will see the Lira regain power ? 25% or more than 30 % ?
2- do the government have the authority to stop the people to take loans from local or international banks ?

1. I think there's too much emphasis on interest rates. The problem is structural. There is no trust to the justice system, economic policies, effective use of resources, education etc. Nothing is predictable. It's a very hostile environment for building your business. Just the other day, Erdogan was ranting about businessmen, saying "we reduced the interest rates, why won't you take loans and invest?!" You see, reducing interest rates didn't work as much as Erdogan would've liked.

2. Government wants people to take loans not the opposite.

 

[Xenon54]

What I think he's trying to do is = low lira => more export opportunities => more industries investments => low unemployment rate. However, this two-edged sword, people in Turkey will not trust lira any more and dollarization will increase.

Why is every single project in the country is being made on dollar base? Even the guarantees are calculated in dollar which increases the cost of these projects immensely.
The turst in Lira has gone years ago any sane investor would to his business in dollar or euro base in Turkey.

 

[Anastasius]

The idea that lower interest rates = more investment only really works if your country has solid regulations and rule of law so investors can be sure that if they invest A, they'll get B or at worst, C. Not invest A and get B, C, X, Z, W, F or G.

Italy, Portugal and Spain are the 3 biggest investors in the Turkish financial sector who stuck with it through thick and thin and even they are having second thoughts. Italy is selling their investments, Spain is buying out everything so it's 100% Spanish-owned and Portugal will probably follow suit. That's like the complete opposite of what Erdogan was (presumably) hoping for.

And the worst thing is that even after Erdogan is gone, it will take Turkey almost a decade to fix the fallout from this stupidity and regain investors' trust.

 

[Saithan]

Beştepe's 'interest and dollar' comment​

Hürriyet columnist Hande Fırat talked about the fact that the dollar/TL rate exceeded 11 after the Central Bank's interest rate cut, and carried the conversation she had with the senior figures in the Presidency to her corner.​

19 November 2021 10:34

Hande Fırat wrote about the meeting she had with senior sources in the Presidency about the Central Bank's interest rate cut and the subsequent rise of the dollar.

Fırat listed the answers item by item as follows:
“The government is aware of the bill that came up with the interest rate cut. This bill will be met. In a sense, the bitter prescription will now be implemented.

The main reason is the lack of early elections. The main target until the 2023 elections will be to increase investments, reduce unemployment and relieve the lower income group.

The government does not want to go to the 2023 elections with high interest rates, high inflation and high unemployment rates. It is aimed to reduce unemployment by increasing investments.

Some economic data is relied on in choosing this policy.

Growth comes first among these data. The Turkish economy grew by 21.7 percent in the second quarter of 2021 compared to the same period of the previous year. At the end of the year, a growth forecast of up to double digits is made.

Other data are export figures. In October, exports increased by 20.2 percent compared to the same month of the previous year and reached 20.8 billion dollars. In the January-October period, exports increased by 33.9 percent compared to the same period of the previous year and reached 181.8 billion dollars.”

'PSYCHOLOGICAL PERCEPTION'​

Fırat also said, "The government also points out that the general economic picture in the world is problematic. Sources claim that there is an attempt to create a perception that the 'economy cannot be managed' in Turkey. "High-level sources from the Presidency justify the policy of interest reduction with these articles. We will see if the government will be able to achieve its goals in a year and a half. However, it will not be wrong to say that 2022 will be a difficult year," he said.

 

[Anmdt]

Is there a lever to pull for an early election other than getting 360 MPs voting for it?

President dismisses his position and the grand assembly, thus requires an early election.

 

[Saithan]

50 cents cost 83 cents​

The increased exchange rate also affected cost calculations. The cost of 50 cents almost doubled to 83 cents. 1 lira has reached its value.​

20 November 2021 10:50 amUpdated: 20 November 2021 10:55

The size and weight of 50 cents are the same. But the cost is increasing day by day. The exchange rate, which rose every day, almost doubled the cost of 50 cents. The cost of producing 50 kuruş was 83 kuruş.

According to the news of Haber Global; 1 lira can now be produced by spending 99 cents. After the Central Bank's interest rate decision, the dollar/TL rate had risen to 11.29. While Euro/TL saw 12.79, the news of the increase started to come one after another. After the increase in the dollar/TL rate, the first news of the hike came from the fuel prices. According to the statement made by EPGIS, an increase of 52 cents per liter was made for gasoline, effective as of Saturday, November 20. On the other hand, there was a 50 kurus increase in diesel, effective from 20 November. Autogas also increased by 45 cents.

 

[Anmdt]

Why is every single project in the country is being made on dollar base? Even the guarantees are calculated in dollar which increases the cost of these projects immensely.
The turst in Lira has gone years ago any sane investor would to his business in dollar or euro base in Turkey.

Meanwhile they force R&D budgets of defence industry projects to be in Lira.
I think financial safety of the 5-gang is more crucial than our nation's fate.

 

[Saithan]

123 milyonluk kumanda merkezine kilit vuruldu

Avrupa Birliği standardındaki Da Vinci adlı ileri teknoloji yazılım karartıldı. 123.9 milyon TL kamu kaynağı harcanarak kurulan Ankara'daki kumanda merkezinin

www.veryansintv.com

Seems the investment that was meant to raise train management to EU standard hit a road block. The advanced tech center was closed down and they're trying to do the management in old fashion style...

No explanation from the responsible ministry on the issue.